Digital services and competitive advantage: Strengthening the links between RBV, KBV, and innovation

• The Resource-Based View of firms has evolved over the last 30 years. • Competitive advantage through digital resources is different to physical resources. • Sustainable competitive advantage for digital firms relies on dynamic capabilities. Research into the Resource-Based View (RBV) and Knowledge-Based View (KBV) of firms has evolved over the last 30 years from being focused on the control of physical resources, through knowledge-based digital resources, to innovation. This paper considers a service perspective of RBV-KBV to help explain differences in the competitive advantage attributable to digital and physical resources. Such an understanding helps explain the evolution of RBV-KBV research over the last 30 years and strengthens the links between the established research themes of RBV, KBV, and innovation. Competitive advantage can be created and retained through digital resources but sustainable competitive advantage for digital service firms relies on those physical resources that provide the dynamic capabilities to innovate, and so continually develop the digital resources.